How Will Blockchain Change the Supply Chain?

How Will Blockchain Change the Supply Chain?

Its disruptive data-recording and -securing technology begs the question: Could blockchain change the supply chain fundamentally and for the better?


  • Blockchain offers the ability to record, track, and verify any transaction.
  • Potential benefits include greater transparency and security.
  • Supply chain operations could record, track, and share information more accurately and easily.

Ever since blockchain technology emerged, experts and industry analysts have been making various predictions for how it will impact their sectors. The supply chain, in particular, has been popularly theorized to be impacted by the technology.

It’s becoming increasingly clear that blockchain has transformative potential when it comes to the future of the supply chain. Here is a summary of what we’re seeing so far.

What is blockchain?

First conceptualized in 2008 by a programmer or group of programmers operating under the name Satoshi Nakamoto, blockchain was originally part of the implementation process of the cryptocurrency bitcoin. Essentially, it’s a distributed database — and it’s special because it keeps records of digital data or events in a way that makes them resistant to being altered or tampered with.

Blockchain allows data to be accessible to many users, even allowing them to add to it. But the original information is immutable, and it leaves a permanent and public chain of transactions. Click To Tweet

Blockchain allows data to be accessible to many users, even allowing them to add to it. But the original information is immutable, and it leaves a permanent and public chain of transactions. SupplyChain247 uses the following helpful analogy:

If the entire blockchain were the history of banking transactions, an individual bank statement would be a single “block” in the chain. Unlike most banking systems, however, there is no single organization that controls these transactions. It can only be updated through the consensus of a majority of participants in the system.

Writing for Forbes, early-adopter researcher Dan Woods describes blockchain as “key for creating an unalterable, trusted record of certain types of transactions.”

Experts are starting to see the potential for blockchain’s use in other arenas, particularly the supply chain. The blockchain ledger “can be used to record, track, and verify trades of virtually anything that holds value,” says Jon-Amerin Vorabutra, VP of Process and Technology at Nova Molecular Technologies.

How will blockchain change the supply chain?

The ability to track any type of transaction securely and transparently is huge for supply chain applications. “Every time a product changes hands, the transaction could be documented, creating a permanent history of a product, from manufacture to sale,” writes Vorabutra. Imagine the reduction in time delays, wasted costs, and errors.

Syncsort, a company building the infrastructure necessary to support the modern data supply chain, has detailed predictions about how blockchain will impact the supply chain, reported by Woods. The company’s CTO, Dr. Tendü Yoğurtçu, identifies blockchain as falling under one of four larger “megatrends” that Syncsort is monitoring: data governance.

“We have some products that we will announce that are blockchain-ready, and data governance will continue to be the umbrella theme for us with blockchain because it’s an evolving data platform and data architecture,” says Yoğurtçu.

Experts and analysts across the industry believe that blockchain can improve the supply chain in the following ways:

  • Recording the quantity and transfer of assets — like pallets, trailers, containers, etc. — as they move between supply chain nodes (Talking Logistics)
  • Tracking purchase orders, change orders, receipts, shipment notifications, or other trade-related documents (SupplyChain247)
  • Assigning or verifying certifications or certain properties of physical products; for example determining if a food product is organic or fair trade (Provenance)
  • Linking physical goods to serial numbers, bar codes, digital tags like RFID, etc. (SupplyChain247)
  • Sharing information about manufacturing process, assembly, delivery, and maintenance of products with suppliers and vendors (SupplyChain247)

The benefits of blockchain for the supply chain

Blockchain technology is ideal for supply chain management. Supply chain companies frequently struggle with lack of transparency, particularly those with complex supply chains. This makes it difficult to isolate errors. This is where blockchain comes into play.

“Because of the way transactions are recorded and tracked using blockchain technology, it makes it much easier to see everything happening in real time,” says Miranda Marquit, of Investopedia.

Additionally, blockchain will allow for increased scalability in the supply chain. Since data cannot be changed or added to, essentially any number of participants can access data from any number of touchpoints. The technology also allows for greater security, since a shared, immutable ledger keeps data from being tampered with.

Finally, blockchain can open the doors for greater innovation in the supply chain. According to Vorabutra, “Opportunities abound to create new, specialized uses for the technology as a result of the decentralized architecture.”

What ways are you predicting blockchain will change the supply chain?

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